The Tax Foundation ranks Virginia in the top 15 states for best corporate and sales taxes, making Virginia a desirable location for doing business.
The Tax Foundation has recently published the 2020 State Business Tax Climate Index. Instead of looking at the amount each state collects in taxes, the index serves as a tool to enable a true comparison between how states tax. This analysis creates a measurement for the tax structures within each state.
The index is broken up into 5 categories:
- Corporate taxes
- Individual taxes
- Sales taxes
- Property taxes
- Unemployment taxes
Based on these categories, each state is ranked from highest to lowest, where the higher the rank the lower the overall taxes and the lower the rank the higher the overall taxes.
Virginia ranks in the top 25 states for overall taxes, over 20 spots higher than neighboring Maryland and the District of Columbia. When analyzing corporate taxes, Virginia ranks in the top 15 with a score of 14, compared to Maryland with 32 and the District of Columbia with 15. Virginia also ranks in the top 15 for sales taxes with a score of 11, compared to Maryland with 19 and the District of Columbia with 36.
Any corporation thinking about where to locate their business must think about the tax policies within each state. Lower taxes, especially lower corporate and sales taxes, increase economic development by preserving higher profits. With low corporate and sales taxes, Virginia is an ideal place for businesses to relocate to economically flourish.